By Steven Doll, Portfolio Strategist
The U.S. stock market ended the week considerably higher as upbeat earnings reports, further government stimulus, and falling initial unemployment claims bolster investor confidence. U.S. small-cap stocks rose 5.4% as they begin to narrow the gap between their large-cap counterparts, which only rose 2.7%. Similarly, international developed markets begin to narrow their gap with emerging markets as they rose 2.6% on the week while emerging markets rose only 1.0%.
Interest rates moved higher this week as the economy shows early signs of a potential recovery. Having said that, the 10-year treasury yield increased from 0.55% to 0.57% and the 2-year treasury yield from 0.11% to 0.13%. However, the total U.S. bond market held steady on the week, rising 0.1%, as demand for the perceived safe assets stays strong.
The price of gold continues to rally, rising nearly 4.0% on the week and over 33.0% year-to-date, as falling interest rates, a weakening U.S. dollar, and economic concerns from the pandemic have substantially increased the demand for the haven metal.
The price of crude oil realized a modest gain of 1.7% this week, despite U.S. and China tensions as U.S. crude inventories drop.
Year-to Date Return (as of 08/07/2020)